Microsoft stock falls after Nokia announcement

Microsoft was the only winner in the Dow Jones industrial average in August, but that was then. This month, it’s the biggest loser. It has fallen 2 percent as the Dow has risen 3.5 percent, recovering much of last month’s losses.

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The software giant’s stock sank last week following news that it would acquire Nokia’s smartphone business and a portfolio of patents and services. The $7.2 billion acquisition is an attempt for it to catch up in the mobile computing marketplace. But several financial analysts expressed reservations about the deal.

“In our view, the best way to unlock shareholder value would be to break the company into its key components,” wrote Brendan Barnicle of Pacific Crest Securities in a note to clients.

Consider that although it’s essential for Microsoft to lessen its dependence on personal computers, Nokia’s cellphone business has struggled.

It was in an attempt to turn things around that Nokia lured Stephen Elop away from Microsoft in 2010.

Nokia’s stock hasn’t rebounded under his leadership. Even so, Elop has emerged as a possible replacement for Microsoft CEO Steve Ballmer, who announced in August that he will retire within the next 12 months.

Microsoft is betting it can develop more appealing Windows phones if the hardware and software are more tightly bundled. It’s a challenge that was only rendered more complex by Tuesday’s launch of Apple’s latest iPhones.